Archive for the Legislation Category

CWPA and California’s wetfish industry are deeply grateful to Secretary Ross and Assistant Administrator for Fisheries Chris Oliver, as well as to West Coast NMFS officials and Governor Brown, for acknowledging that our sardine fishery closure met the legal requirements for designation as a fishery resource disaster. This determination now makes our sardine fishery eligible for NMFS fishery disaster assistance. We look forward to learning the level of disaster assistance that the Department of Commerce will determine. The fact that relief is coming is very good news.

Today, Secretary of Commerce Wilbur Ross announced that commercial fishery failures occurred between 2015 and 2017 for salmon fisheries in Washington, Oregon, and California, in addition to the sardine fishery in California.

“The Department of Commerce and NOAA stand ready to assist fishing towns and cities along the West Coast as they recover,” said Secretary of Commerce Wilbur Ross. “After years of hardship, the Department looks forward to providing economic relief that will allow the fisheries and the communities they help support to rebound.”

Between July 2016 and March 2018, multiple tribes and governors from Washington, Oregon, and California requested fishery disaster determinations. The Secretary, working with NOAA’s National Marine Fisheries Service (NMFS), evaluated each request based on the available data, and found that all but one (the California red sea urchin fishery) met the requirements for a fishery disaster determination.

The determinations for West Coast salmon and sardines now make these fisheries eligible for NOAA Fisheries fishery disaster assistance. The 2018 Consolidated Appropriations Act provided $20 million in NOAA Fisheries fishery disaster assistance. The Department of Commerce is determining the appropriate allocations of these funds to eligible fisheries.

The Senate bill, S.1520, or the “Modernizing Recreational Fisheries Management Act of 2018,” introduces changes to the Magnuson-Stevens Act (MSA)—the main law governing U.S. fisheries—that would impose increasingly burdensome regulations on American fishermen and undermine H.R. 200’s goal of increasing flexibility in fisheries management.

Of particular concern are provisions contained in Section 104 of the bill, “Rebuilding Overfished Fisheries.“ Rather than giving fisheries managers more flexibility in how they manage and rebuild fish stocks, these new requirements added to S.1520 make rebuilding requirements more stringent and onerous.

For example, one of the most disturbing changes is the requirement that Regional Fishery Management Councils achieve a 75 percent chance of rebuilding a stock if that stock has not rebuilt in as short a timeframe as possible. What that means in practice is that regulators will be forced to set quotas according to a rigid, predetermined timeframe, rather than one based around scientific evidence or biological necessity. This will lead to quotas that are much lower than they need to be to sustainably manage the species, and fishing communities being unnecessarily hurt in the process.

In a similar vein, the bill also removes existing language from MSA that allows fisheries managers to alter rebuilding timeframes if a species is depleted or unable to recover due to “ecological” issues that are not related to fishing activity. This would prevent managers from modifying their plans to adapt to changing environmental conditions and other unforeseen circumstances.

Taken together, these changes would further force the Councils to manage species according to an arbitrary timetable, rather than thorough a plan that best takes into account prevailing biological and economic conditions. This will result in increased hardships for fishing communities, with little additional conservation benefits.

The bill also introduces new language on the issue of quota allocation between different fishery stakeholders in mixed-use fisheries. While this is already done routinely through the Council process, the bill adds “ecological” considerations to the policy of allocation, in addition to current consideration of economic and social factors. This is an obvious attempt to create allocation policy with the sole purpose of undermining commercial fisheries and altering allocations.

In addition, S.1520 does not include the same allocation language from H.R. 200, which would require that, when evaluating the full economic impact of commercial fisheries, managers consider the full seafood chain of custody. While this may sound like a minor change, this language is the only way to do a full and fair economic impact comparison study between commercial and recreational fisheries, and thus the only way to arrive at a fair allocation.

We are eager to support a reauthorization of MSA that maintains the strong fisheries management that has made American fisheries so successful over the past 40 years, while also allowing our fishing communities to remain economically vibrant. Unfortunately, in its current form, S.1520 meets neither of these goals.

Greg DiDomenico is the Executive Director of the Garden State Seafood Association. Diane Pleschner-Steele is Executive Director of the California Wetfish Producers Association.

Climate change is driving fish species to migrate to new areas, and in the process they’re crossing political boundaries – potentially setting up future conflicts as some countries lose access to fish and others gain it, according to a recent study published in the journal Science.

Already, fish and other marine animals have shifted toward the poles at an average rate of 70 kilometers per decade. That rate is projected to continue or even accelerate as the planet warms.

When fish cross into new territory, it might prompt competitive harvesting between countries scrambling to exploit disappearing resources.

“Conflict leads to overfishing, which reduces food, profit, and jobs that fisheries can provide, and can also fracture international relations in other, non-fishery sectors,” Malin Pinsky, the lead author of the study and an assistant professor of biology at Rutgers University, told SeafoodSource.

The study looked at the distribution of nearly 900 commercially important marine fish and invertebrates, examining how their movements intersect with 261 of the world’s Exclusive Economic Zones. By 2100, more than 70 countries will see new fish stocks in their waters if greenhouse gas emissions continue at their current rates.

Cutting greenhouse gas emissions could reduce the scale and number of these migrations by half or more, Pinsky said.

Conflict over shifting fish stocks is not unheard of. In the 2000s, migrating mackerel in the northeast Atlantic caused such a rift between Iceland and other nations that it played a role in derailing attempts to join the European Union. In the eastern Pacific, a bout of warm ocean temperatures in the 1980s and 1990s shifted salmon spawning patterns, prompting a scuffle between U.S. and Canada.

Pinsky listed the United Sates, Iceland, Britain, Russia, and countries in East Asia as some that will have to start sharing significantly more.

“I worry in particular about East Asia, where maritime relations are already tense over disputed borders,” Pinsky said.

Many countries may end up getting up to 30 percent of their catch from new fisheries that have migrated into their exclusive economic zones by 2100, according to the study. Australia and fisheries around the Bering Sea may get an even higher percentage.

But tropical countries seem likely to suffer significantly, since fish will move out and others won’t move into the replace them.

“Fish in general are moving to higher latitudes, which means new species aren’t moving into countries near the equator,” Pinsky said. “We think that means there will be fewer fish in the tropics, but we don’t know for sure yet.”

Some species might adapt to warmer waters, and some evidence suggests that is likeliest to happen in the tropics, where fish won’t also have to compete with new species, Pinsky said. “However, we don’t yet know if they can adapt fast enough to keep up with rapidly warming waters,” he said.

The Gulf of Maine is already experiencing major migrations. Lobster are moving towards Canada, cod are shifting deeper, and black sea bass are showing up north of Cape Cod.

“The Gulf of Maine is really ground zero for mitigating and adapting to climate-induced change,” Marissa McMahan, a senior fisheries scientist at Manomet, a New England science nonprofit that works on environmental issues, including by partnering with fishermen, told SeafoodSource.

While some fishermen can adapt to migrating fish, others struggle. Large offshore trawlers that had targeted sea bass in areas like North Carolina are steaming as much as 10 hours north just to catch sea bass, McMahan said. But smaller inshore boats that use fish pots to catch sea bass can’t do that, suffering greater effects from the shifting fish.

Fishermen are responding to climate-driven species shifts in different ways. Some are targeting underutilized or undervalued species. Younger fishermen, in particular, seem more willing to look at the potential of aquaculture to diversify their income.

“That way their entire livelihood doesn’t depend on a fishery that could collapse if the species shifts,” she said. But most fisheries are closed or have limited entry, making it difficult to get a license, she added. “So if you’re a lobstermen looking to diversify into another wild harvest fishery, there are very few options.”

Manomet is helping fishermen prepare. The group has worked with soft-shell clam harvesters to develop farming techniques, and is researching the viability of quahog aquaculture. They are working on developing fisheries and markets for invasive green crab, so fishermen can benefit from them economically.

As fish migrate to new waters, better data is needed to really assess stocks. Fishermen and their observations need to be included, McMahan said.

“They are on the front lines, so to speak, and witness the changes we are talking about each and every day. The amount of knowledge they posses about these ecosystems and stocks is unparalleled,” McMahan said.

A groundfisherman on the Gulf of Maine — one of commercial fishing’s endangered species. Melissa Wood photo.

The range of responses to the passage of the Magnuson-Stevens Act reauthorization in the House of Representatives on July 11 shows the diversity and breadth of this industry.

The biggest hold-up on coast-to-coast support for H.R. 200 was the inclusion of a recreational grab at snapper-grouper management in the Gulf of Mexico, which gets a leg up in the House version of the bill (a Senate version is TBD). In the end, most major South Atlantic and Gulf of Mexico associations offered their support of the bill with an exception for this portion as well as the attempt to eliminate annual catch limits in recreational fisheries (see Mail Buoy on page 6).

The controversial flexibility clause has perhaps been the most talked about component of this reauthorization. The Fishing Communities Coalition — a group of small-boat fishery associations connected also by their relationships with NGO funding and catch share management — came out strongly opposed to the reauthorization largely because of the flexibility component and the hurdles the bill puts in the way of new catch share programs. These changes, they say, will erode the nation’s deep roots in science-based sustainable fishery management.

However, several provisions in the act aim to include more data points in fishery management, including cooperative data, stock assessment plans for all federally managed stocks and transparency in the council management process.

Flexibility is part of a long-needed recognition that not all fisheries bounce back based on an arbitrary deadline of 10 years. It also goes hand in hand with expanding our vocabulary to include the term “depleted,” rather than using the blanket term “overfished.” Neither of these standards was scientific.

Moreover, the new rebuilding guidelines would encourage the councils to take into account the economic as well as ecological components of rebuilding that affect fishing communities of all sizes, as mandated by the act’s National Standards.

“The use of economic harm to extend rebuilding time frames could extend rebuilding beyond an acceptable point,” said the coalition in a press release.

But how do we define what is acceptable? A total shutdown may bring a stock back within a few years. But if it does so at the cost of local infrastructure and results in a wave of consolidation, is it the best choice?

I can agree with the skeptics that we have managed federal fisheries with a 10-year rebuilding time line to great success. This standard has been perfectly acceptable for many fisheries in recovery. However, it has also been severely detrimental to the groundfish fisheries on the East and West coasts. This amendment is necessary for those fisheries on the fringe.

If we can’t make exceptions for those fleets and their communities, then we can hardly brag about our great successes in management. This is the pendulum swinging. If this reauthorization doesn’t work as expected, then we can adjust it as necessary. That is the beauty of our democratic process — it allows us to grow, change and revise our laws to reflect changes in technology, culture and knowledge.

One reauthorization cannot be all things to all stakeholders. The nature of a federal bill involves give and take. For the sake of fishing communities that have been straining to stay afloat under the 10-year rebuilding guideline, let’s give this a shot. Give them a break and keep fighting for sustainability across the board. We won’t get there without better data, of course. But we also won’t get there by sticking to our guns when we know they’re prone to misfire.

The administration’s aid package has been popular with voters, particularly in rural areas, according to a new POLITICO/Morning Consult poll. | Saul Loeb/AFP/Getty Images

As President Donald Trump prepares to continue ratcheting up tariffs, the duties he has already imposed on $34 billion worth of goods from China and around $50 billion worth of steel and aluminum exports from around the world are causing pain across the United States.

That’s already prompted Trump to promise $12 billion in assistance to help farmers who have been hit with retaliatory duties on their exports to China, the European Union and other key markets. The aid package has been popular with voters, particularly in rural areas, according to a new POLITICO/Morning Consult poll. But the same poll also showed that most voters in farm states prefer free trade and better access to markets over subsidies.

So far, the administration has no plans to extend that aid to other adversely affected sectors, which the U.S. Chamber of Commerce estimated this week could cost another $27 billion.

Here’s a roundup of some of the complaints about Trump’s tariffs heard on Capitol Hill in recent weeks:

KANSAS — $361 million of exports threatened by retaliatory tariffs

China’s retaliatory tariffs on nearly all agricultural imports from the United States have hurt Kansas farmers like Stacey and David Forshee, who raise cattle and grow soybeans, corn and wheat on their farm in the north-central part of the state, Sen. Jerry Moran (R-Kan.) said last week during a Senate Appropriations subcommittee hearing.

“All told, it has been estimated that $361 million of Kansas exports are being threatened by various tariffs” imposed by China, the EU, Canada and Mexico in response to Trump’s actions, he said.

NEW HAMPSHIRE — Lost sales of mead, lobster

Moonlight Meadery, a small business based in Londonderry, N.H., “had a deal effectively killed by the retaliatory tariffs on American wine,” Sen. Jeanne Shaheen (D-N.H.) said. “This is a deal that would have doubled their output. For a small business that meant a lot. But what’s happened, they’ve had to lay off employees and they’ve also been hit by the increased cost of aluminum because of the tariffs on steel and aluminum.”

Another New Hampshire business, Little Bay Lobster Company, that previously sold 50,000 pounds of lobster to China each week “can no longer find a buyer,” Shaheen added. After the Trump administration slapped a 25 percent duty on $34 billion worth of Chinese exports, China retaliated with a 25 percent tariff that priced New Hampshire lobsters out of the market, Shaheen said.

Another business in her state, Intelligent Manufacturing Solutions Corp., expects to lose a $5 million circuit-board contract to a Chinese competitor because of Trump’s tariffs, Shaheen added.

TENNESSEE — Canceled home appliance plant expansion

Electrolux, a home appliance manufacturer, canceled a $250 million plant expansion in Springfield, Tenn., because of Trump’s decision to impose tariffs on steel and aluminum, Sen. Lamar Alexander (R-Tenn.) said.

Bush Brothers and Company, best known for its canned baked beans, has experienced an 8 percent decline in its revenue because of higher steel prices. Another Tennessee company that manufactures gas grills is taking a loss on every sale they make to Canada and EU because of Trump’s tariffs, Alexander added.

MAINE — Bleacher manufacturer caught in a price squeeze

Hussey Seating Co., a bleacher manufacturer based in North Berwick, Maine, has seen prices for steel increase 45 percent over the past year as a result of Trump’s tariffs. “And the problem is that this small manufacturer has locked in contracts, well before beginning a project that did not anticipate a 45 percent increase in the cost of steel,” Sen. Susan Collins (R-Maine) said.

Maine’s lobster industry, which is the state’s biggest exporter, has also taken a big blow as a result of retaliatory tariffs imposed by China, Collins added. To make matters worse, Canada now has a free trade agreement with the European Union that gives it duty-free access to the EU market, while Maine lobstermen still face tariffs of 8 to 30 percent, Collins said.

ALASKA — Salmon, cod and shellfish jobs put at risk

China’s 25 percent retaliatory tariff on U.S. seafood has “clearly rattled my state,” Sen. Lisa Murkowski (R-Alaska) said. The increased duty affects about 40 percent of the state’s salmon exports and 54 percent of its cod exports that went to China last year, she said.

“So this is, this is very, very significant to us. We’re still trying to figure out exactly what this means, not only to our fishermen but to the processors, the logistics industry, all aspects of the seafood supply chain,” Murkowski said.

In addition, Trump’s threat to impose a 10 percent duty on another $200 billion of Chinese exports could boomerang back on Alaska.

“Many of our fish and shellfish that are harvested in the state are then processed in China before re-importing back to the United States for domestic distribution. So in many ways, [Trump’s additional proposed tariffs would impose] a 10 percent tax on our own seafood, which is just a tough one to reconcile,” Murkowski said.

ARKANSAS — Hardwood lumber mills losing China sales

Hardwood lumbers mill in the Southern United States are also under pressure because of Trump’s decision to impose tariffs on China. The nation is the largest overseas market for U.S. hardwood lumber, but sales “essentially have ceased” since Trump’s duties went into effect, Sen. John Boozman (R-Ark.) said.

“Prices are in freefall, markets have collapsed, mills will be closing unless the situation is resolved fairly soon,” Boozman said, noting that the hardwood mills are the primary source of employment in many rural communities across the South.

WEST VIRGINIA — Auto supply chain vulnerabilities

Sen. Shelley Moore Capito (R-W.Va.) said she was worried about harm of new steel and aluminum tariffs on a Toyota production facility in Buffalo, W. Va., that employs 1,600 workers. But the effect could be even worse if Trump follows through on plans to impose automotive tariffs because parts made in the state cross the border with Canada at least two times.

“The raw aluminum comes from Canada. It goes to a Toyota plant in Tennessee that makes the engine block. The engine block then comes to West Virginia, where we make, very well, the six-cylinder engines and additions to the transmissions. Then half of those engines go from West Virginia back to Canada, where they are dropped into Lexus RX and then brought into this country for sale,” Capito said.

DELAWARE — Prospect of lost chicken sales to South Africa

After years of pressure, the Obama administration persuaded South Africa to remove barriers to U.S. poultry exports. Now all that progress is at the risk of being lost because Trump hit South Africa with tariffs on its steel exports, said Sen. Chris Coons (D-Del.).

“I had a very difficult meeting with their trade minister,” Coons said. “They’re going to be justified in imposing countervailing duties that may well close the door to this newly opened market for our poultry.”

WASHINGTON STATE — Apples, cherries and pears caught in the crossfire

Not long after Trump imposed tariffs on Chinese-made steel and aluminum, Beijing began insisting on inspecting all shipments of U.S.-produced apples, making it impossible for Washington suppliers to continue to trade, Cass Gebbers, president and CEO of Gebbers Farms in Brewster, Wash., told Congress in July.

While that situation improved after a while, China has boosted tariffs on U.S. apples, pears and cherries to 50 percent, from 10 percent previously, in response to duties imposed by Trump. That jeopardizes about $130 million in cherry sales, $50 million in apple sales and $1.5 million in pear sales to the Asian market, Gebbers said.

TEXAS — Hitting cattle and dairy farmers at a bad time

“With Texas relying so heavily on trade overseas, we are concerned with the blowback from the administration’s decision to place tariffs on our trading partners,” Russell Boening, a dairy and cattle producers from Poth, Texas, said in testimony to Congress.

“Agriculture is bearing the brunt of retaliation at a time when farmers are already facing low commodity prices, high input costs and unpredictable weather. Net farm income has also dropped 52 percent in the last five years, making it extremely difficult for farmers and ranchers to continue operating,” Boening added.

Kevin Paap, president of the Minnesota Farm Bureau told Congress about how much farmers in his state rely on its three biggest markets: Canada, Mexico and China. In 2016, agricultural and food exports accounted for nearly one-third of Minnesota’s total merchandise exports,” he said. “Specifically, more than 24 percent of all Minnesota agricultural exports go to Canada and nearly 24 percent of all Minnesota agricultural exports go to Mexico.”

He stressed that the better course of action would be to expand, rather than contract, trade. “The current tariffs, continuing back-and-forth retaliatory actions and trade uncertainties are hitting American agriculture from all sides and are causing us to lose our markets,” he added. “Once you lose a market, it is really tough to get it back.”

MONTANA — Indebted young farmers worried about the future

Farmers just starting out are already feeling discouraged when they see gluts and falling prices. That is going to make it harder to motivate the next generation, several producers have noted.

“For young and beginning farmers like me the stakes are even higher,” said Michelle Erickson-Jones, president of the Montana Grain Growers Association. “We are often highly leveraged, just establishing our operations, as well trying to ensure we have access to enough capital to successfully grow our operations. Increased trade tensions and market uncertainty makes our path forward and our hopes to pass the farm on to our sons less clear.”

NEW JERSEY — Bitten by South Korean steel quota restrictions

South Korea was one of the few countries that escaped Trump’s new 25 percent duty on steel, but only because it agreed to restrict its exports to the United States at 70 percent of the average levels for 2015 to 2017. That has created a huge headache for Micro, a precision medical-device manufacturer based in Somerset, N.J.

“Let me be blunt: For Micro, this quota is catastrophic,” the company’s president, Brian Semcer, said in testimony. “Under a best-case scenario, the quota would limit Micro’s steel imports to 70 percent of our recent yearly average. That would mean a 30 percent loss of market share and would effectively bar us from helping our customers develop and introduce any new products or expanding our operations in the foreseeable future.”

MARYLAND — Forking out big bucks, and time, for tariff exclusion requests

Companies that rely on imported steel can receive an exclusion from the new steel and aluminum tariffs, if they can prove to the Commerce Department that no domestic steel company can manufacture the product they need. That’s turned out to be a costly and frustrating experience for many manufacturers, including Independent Can Company, a family-owned business based in Belcamp, Md.

Company President Rick Huether told Congress his company has spent over $50,000 internally for employees to prepare 40 exclusion request. “This represents over 500 hours which could have been time spent building the business versus defending the business,” he said.

FLORIDA — Frustrated by government bureaucrats

Other companies complain of their treatment by Commerce Department officials assigned to decide whether their exclusion request will be approved. That was the experience of Sanitube, a family-owned manufacturer based in Lakeland, Fla., that makes stainless steel tubes, valves and fittings for use in the food and beverage processing industry.

After its first exemption request was denied, Sanitube spent three weeks unsuccessfully trying to contact department officials by both phone and emails to find out why, company president Todd Adams told Congress.

Finally, the company asked for help from Sen. Bill Nelson (D-Fla.), which led to a phone call from Matthew Borman, the deputy assistant secretary of Commerce for export administration. Although Borman did explain the mistake the company made in its paperwork, Sanitube still had to start the exclusion process again.

Adams also complained about difficult interactions with one Commerce Department staffer, whom he accused of a “lack of professionalism” because of the way he handled Sanitube’s exclusion request.

Original post: https://www.politico.com/story/2018/08/01/trumps-tariffs-sting-farmers-businesses-from-sea-to-shining-sea-717555

Yesterday the House passed H.R. 200, the Strengthening Fishing Communities and Increasing Flexibility in Fisheries Management Act, which modifies and reauthorizes the Magnuson-Stevens Act.

Members of Saving Seafood’s National Coalition for Fishing Communities from around the country have been invested in improving MSA for years, and weighed in with their comments and concerns at various points in this process.

Many of these concerns were addressed during the committee process and in the discussion of amendments. Several Members of Congress cited support from NCFC members for the bill during the debate on the House floor.

From Rep. Bradley Byrne of Alabama:

Let me tell you, there are over 170 groups that have signed on to being supportive of this bill. I do not have time to read all the names to you, but let me just read a few: the Congressional Sportsmen’s Foundation…the National Coalition for Fishing Communities…and the Guy Harvey Foundation. This is a very broadly, deeply supported bill among people who are actually fishing. Now, it may not be supported by people who don’t fish and who don’t know anything about fishing, but for those of us who do fish…we like it.

From Rep. Garret Graves of Louisiana:

…Mr. Chairman, this bill is bipartisan. It’s why we have bipartisan support for this legislation. We have co-sponsors. It’s why the Congressional Sportsmen’s Foundation, the National Coalition for Fishing Communities…American Scallop Association, Garden State Seafood Association, West Coast Seafood Processors Association, North Carolina Fisheries Association, Florida Keys Commercial Fishing Association, Gulf Coast Seafood Alliance, Southeastern Fisheries Association and many, many others that have a genuine stake in the sustainability of our fisheries [support this legislation].

In the debate over a proposed amendment from Reps. Jared Huffman of California and Alcee Hastings of Florida that would be detrimental to commercial fishing, Rep. Don Young of Alaska, author of the bill, quoted from a letter signed by several of our members and submitted the day before the vote. The amendment was ultimately defeated.

According to a letter authorized by the National Coalition for Fishing Communities…I want to submit for the record, if I could, the letter to the leadership of the House and to myself where they say… “We believe it will undermine the MSA, impede reforms that are desperately needed, and attack jobs in coastal communities around the country, including California and Florida,” the home states of Mr. Huffman and Mr. Hastings. I suggest this amendment is uncalled for and frankly will gut the bill and the MSA, period.

The U.S. imported more than 6 billion pounds of seafood valued at more than $21.5 billion in 2017. NOAA photo.

Samuel Hill June 26, 2018

The United States imported more foreign seafood than ever in 2017, according to NOAA.

The U.S. imported more than 6 billion pounds of seafood valued at more than $21.5 billion in 2017. U.S. exports paled in comparison — more than 3.6 billion pounds of seafood were exported, valued at $5.4 billion.

According to NOAA, the United States imports more than 90 percent of the seafood the public consumes, despite its own active industry. The amount of seafood exported for processing and reimported is unknown, but considered “significant” by NOAA.

Commerce Secretary Wilbur Ross has identified reducing this deficit as a priority for the government. One prominent strategy would be increasing the amount of aquaculture-based farming Jennie Lyons, a NOAA spokeswoman, told the Associated Press.

The United States trades in seafood with countries all over the world, and the countries it buys the most from include Canada, China and Chile. Major buyers of U.S. seafood include China, Japan and South Korea.

While markets in China have been growing, those markets are at risk as an all-out trade war seems plausible between China and the United States. On June 15, U.S. and Chinese officials announced a bundle of tariffs, each targeting the other nation’s exports.

A California market squid. Photograph courtesy of the National Oceanic and Atmospheric Administration.

Facing difficulties in the other pelagic species it catches, squid was a much needed bright spot for the ‘wetfish’ sector in the US state of California. Until last week.

Landings of California market squid (Doryteuthis loligo opalescens) totaled over 68,211 metric tons for the 2017 to 2018 season, which ran from April 2017 until March. That compared to 38,510t for the 2016/17 season, a sign the fishery was climbing back from years of depressed catches due to El Nino.

Nearly 8,200t have been caught during the first three months of the current season, and with the news that the sector’s key export market, China, will impose 25% tariffs on the product on top of existing 27% tariffs, a bountiful season this year may not be a good thing.

“Fishing is slow right now which is probably better because it gives it a chance to adapt,” John DeLuca, president and CEO of the J DeLuca Fish Company, told Undercurrent News.

He said that like other ‘wetfish’ harvesters, his San Pedro, California-based firm has seen China-bound orders cancelled ahead of the July 6 deadline when the new rates are supposed to come into effect.

The solution, DeLuca said, will be to “wake up old customers and markets” such as Malaysia, Indonesia, and the Philippines, although none of those countries buy squid at the prices and volumes that China does currently.

The result, DeLuca predicted, will be lower prices for processors and fishermen. Ex-vessel prices for squid, currently around, $1,000 per metric ton, are poised to go lower to $700, perhaps even as low as $500, he said.

“How far its going to go down, what’s the bottom going to be, we still don’t know,” he said.

‘Wetfish’ worries

Days earlier, squid processors told Undercurrent that prior to the new tariffs China was paying roughly $3,500/t for squid, which included a 27% tariff already. However, once the new 25% tariff ($911.25) is added on, the cost of squid in China will go from a total of $3,645/t to $4,556.25/t, which Chinese buyers likely won’t bear.

For Diane Pleschner-Steele, the executive director of the California Wetfish Producers Association, that means the fishermen and processors could be forced to receive less for their efforts.

“That gets down the slippery slope of, if you’re going to reduce the price you have to pay the boats less and are the boats going to be able to go fishing at the lower price given the fact that fuel is now $4 per gallon?” she said.

New markets remain an option, she added, although it will depend on global supply and demand for squid.

The processors that her group represents are historically known as “wetfish” producers because their target pelagic species — sardine, anchovy and mackerel — were canned while still wet.

But in addition to the trade woes, Pleschner-Steele said that the return of El Nino conditions could cause further issues. The National Oceanic Atmospheric Administration issued an “El Nino watch” earlier this month for the Pacific.

The agency predicted “neutral” El Nino conditions for the Northern Hemisphere for the rest of the summer with “the chance for El Nino increasing to 50% during fall, and ~65% during winter 2018-19”.

“We’re starting to see all the signs of it again. We’re seeing the red crabs coming again. We’re seeing fish pushing north. Usually when they start catching squid in Oregon it means that El Ninos aren’t far behind,” Pleschner-Steele said.

Unfortunately for wetfish fishermen, conditions for the pelagic species they catch haven’t been optimal either. Anchovy landings have been low, and a judge recently invalidated a rule allowing for a 25,000t quota, mackerel haven’t been plentiful, and the sardine fishery has been closed to directed commercial fishing although an incidental fishery is allowed.

A California market squid. Photograph courtesy of the National Oceanic and Atmospheric Administration.

The 25% retaliatory tariffs that China has promised to slap on about a billion dollars worth of US seafood imports don’t go into effect for another three weeks, but US squid producers already are feeling the pain.

Chinese buyers have started cancelling their orders out of concern that shipments won’t arrive in time, Undercurrent Newshas learned.

“People are not buying anything right now,” said Jeff Reichle, president of Lund’s Fisheries, a squid harvester, processor and exporter based in Cape May, New Jersey. “China is completely dead.”

China issued its retaliatory tariffslate on Friday, including nearly 200 seafood items along with numerous agricultural goods in a list of some 545 total items worth a combined $50bn, as part of a tit-for-tat trade battle with US president Donald Trump. Trump earlier in the day had updated the list of Chinese products for which he had levied a 25% import tariff, increasing the number to 1,102 worth $50bn.

Calamari. Photo courtesy of Del Mar Seafoods.

Following China’s response, the White House on Monday night furtherupped the anteby ordering the US Trade Representative to draw up a new list of $200bn-worth of Chinese goods to hit with an additional 10% tariff.

Beijing’s tariffs threaten to hit a number of seafood sectors particularly hard when they go into effect in a few weeks, including theUS lobster industry, which counted on China to buy 7,894 metric tons of lobster in 2017 worth $136.9 million.

Not too far behind the US lobster industry in its reliance on China is the US squid industry.

The US sent China 34,713t of squid worth $92.8m in 2017, nearly half of its overall 71,165t squid export volume and more than half of its $181.9m overall export value, based on National Oceanic and Atmospheric Administration data (NOAA).

By comparison, the second and third largest markets for US squid are Vietnam, which imported 8,855t worth $25.4m last year, and Japan, which imported 8,055t worth $21.5m.

‘We’re all dazed and confused here’

In particular, it’s the California market squid (Doryteuthis loligo opalescens) that the Chinese love. China imports roughly 70% of the 107,048 metric tons of the species caught off the California coast, estimates Joe Cappuccio, founder and president of Del Mar Seafoods, the US’ largest harvester and processor of the species.

Smaller and less expensive than most other squid, the California market squid can reach a total “tube length” of 28 cm, though a more typical size is 10 to 15 cm. They live just six to nine months, dying shortly after they reproduce, but are known for being able to handle a high amount of fishing pressure.

The California squid fishery was started in 1863 by Chinese immigrants, who used torches at night to attract them and skiffs to encircle a net around them. Today they’re caught by purse seiners and light boats who still use lights to draw them in.

When it comes to consuming the creature, “there is no substitute for California squid”, Reichle said. “The person that goes to a restaurant in China and orders a lobster is not the same person that orders squid. The squid, in China, is eaten by everyone, regardless of income level.”

Americans see squid and think calamari. But in China, squid is often served in a hotpot, dropping it into boiling water at a table. As a result, it’s popular during winter months.

China’s move was a punch to the gut for Del Mar, Cappuccio said. His company maintains eight of its own squid harvesting vessels and contracts with three other independent boats to harvest 20% to 25% of the California quota.

Lund’s, which also maintains a West Coast operation, catches and processes about 10% of California’s squid, said Reichle.

“We’re all dazed and confused here,” Cappuccio said on Tuesday.

China recently has paid top dollar for the California squid – roughly $2,700 per metric ton – plus a roughly 27% tariff based on a “minimum price” set by the Chinese government of $3,500 ($945). However, once the new 25% tariff ($911.25) is added on, the cost of squid in China will go from a total of $3,645 per metric ton to $4,556.25, an amount he and Reichle are both convinced the Chinese importers will not being willing to bare.

There are few remaining options for the US companies, except for reducing costs in order to keep the pain as low as possible for the Chinese buyers, the two men said.

“We’re all going to have to cut our margins back, the harvesters and the processors,” Cappuccio said.

On the bright side, as the price of squid is reduced, doors might open in other countries that were outbid by China. Cappuccio mentioned the Philippines, which he suggested could buy eager to buy more than the 1,732t of squid it spent $4.2m on in 2017.

Chinese importers similarly will struggle to replace California squid, Reichle said. There aren’t other kinds of squid that can easily take its place. In recent years when El Ninos, bands of warm ocean water that develop in the central and east-central equatorial Pacific, have hurt production, China simply went without importing as much squid, he said.

Solution needed before October

Undercurrentconfirmed at least one report of squid containers on the water that may not get into China. Cappuccio said his company is keeping its fingers crossed for a few that were en route to China on Friday when the news broke about the tariffs.

But it could be worse, he said.

The Monterey Bay area of the California coast where squid are being harvested now accounts for only 20% to 30% of the total annual quota. The much larger portion, roughly 80%, will get harvested in the more southernly California coast between early October and late December.

However, should the Trump administration not be able to work out its differences with China before early October, the US squid industry could be in trouble.

“Come October, our company alone will be packing and shipping 30 containers a day, and we’ve done as many as 40,” Cappuccio said, noting that a single container typically contains 50,000 lbs.

Multiple trade experts have been quoted in the press as expressing skepticism that a deal can be reached between China and the US before July 6, and one trade expert said it could take the rest of the year. But Cappuccio is trying to remain optimistic.

“I think it’s too early right now to know what to think,” he said Tuesday. “We’re all guessing at this point.”

Just how many anchovies are there off the northern coast of California and are there enough to fish commercially?

Environmental activist group Oceana and the National Marine Fisheries Service (NMFS) have different answers to those questions, and a federal judge’s ruling recently favored Oceana’s view, reducing opportunities for California fishermen.

At issue is the science that NMFS relied on in reaching a 2016 decision to set the total allowable catch (TAC) for northern California anchovy at 25,000 metric tons. The agency set that limit — even though landings typically only total less than a third of that, 7,300t — judging the stock’s maximum sustainable yield to be 123,000t, and calculating an acceptable biological catch of 100,000t. The TAC was set, conservatively, the agency said, at a fourth of that level.

However, after the 2016 rule was adopted, Oceana sued NMFS in federal court arguing that the rule violated principles established in the the Magnuson-Stevens Act because the agency failed “to articulate the scientific basis for this catch limit”.

In January, judge Lucy Koh approved Oceana’s motion for summary judgment vacating the 25,000t TAC rule. NMFS had asked judge Koh to amend that judgement but last week, she declined to do so. When contacted by Undercurrent News, representatives of NMFS’ parent agency, the National Oceanic and Atmospheric Administration (NOAA), said that its lawyers were reviewing the judgment. It has not decided if it will appeal.

NMFS is currently working on new assessments of the stock to inform future TAC decisions.

Precipitous decline?

In its lawsuit, Oceana, claiming that the anchovy stock had “declined precipitously”, argued that NMFS hadn’t conducted a stock assessment for the species since 1995 and that the true size of the northern anchovy biomass averaged between 10,000t to 15,000t from the 2009 to 2011 period.

It made this claim in part due to a piece of independent research authored by Alec MacCall, which looked at densities of anchovy eggs and larvae.

NMFS argued that that the MacCall study had shortcomings.

“These egg/larval data were collected by the California Cooperative Oceanic Fisheries in a fairly small portion of the range of the stock between San Diego and Point Conception, California,” NMFS lawyers argued, adding that the model used in the study did not take into account anchovies that didn’t spawn during the period studied or laid their eggs elsewhere.

But the judge wrote that “defendants’ arguments fail to discredit the MacCall Study”, and said that because the 25,000t TAC wasn’t based on “best available science”, it would be vacated.

Wetfish worries

Speaking to Undercurrent about the ruling, Diane Pleschner-Steele, the executive director of the California Wetfish Producers Association, also characterized the MacCall study as flawed. Her group’s members have seen a “huge abundance” of anchovy despite concerns that the stock has collapsed.

Pleschner-Steele said that her group worked last year with the California Department of Fish and Wildlife to perform an aerial survey of anchovy stocks.

“The department’s plane flew along the coast inside the area that the NOAA acoustic trawl survey was transecting at the same time, and our spotter pilot estimated tonnage of the schools he observed,” she wrote. “We documented tens of thousands of tons of coastal pelagic species — both sardine and anchovy — that the NOAA cruise did not see or factor into its assessment because they survey largely offshore and don’t come into nearshore waters. This is now recognized as a problem, and we’re hopeful that we can improve stock assessments over time.”

The California ‘wetfish’ industry that traditionally relied on squid harvesting but supplements that fishery with anchovy, sardines and mackerel. Unfortunately for the fishermen, the sardine fishery has been closed to directed commercial fishing — although an incidental fishery is allowed — and mackerel landings have been low in recent years.

“Things are still pretty tenuous. Right now the only fishery we have is squid,” she said.